Sitting Down With Bank Of America CEO Brian Moynihan

KENNETH R. GOSSELIN, kgosselin@courant.com

Bank of America CEO Brian Moynihan stopped recently in Farmington to visit a major office of the bank's home equity lending business. In the past 18 months, the location has added 200 employees, for a total of 650, most of them in home equity. More growth, the bank says, is expected in the coming months.

In a conversation with The Courant, Moynihan talked about the changing banking business, new technology on the horizon, and what it has been like leading the bank since 2010. The past four years have been among the roughest in Bank of America's history. The bank has now paid nearly $75 billion in settlements tied to the 2008 mortgage meltdown and lending practices. The latest settlement, $16.6 billion, came just last week.

Q: You began your banking career in New England at the old Fleet Bank in the early 1990s. Since then, a lot of change has taken place in the industry. What is the biggest thing, or perhaps, the most surprising thing you've seen?

A: The remarkable thing is that you are finally seeing nationwide franchises that are capable of serving clients on a nationwide basis. In the '80s, before nationwide interstate banking passed, we were all constrained to geography, and now you can have nationwide services. It took longer than people thought but you're finally to where there is one set of products across the whole country, and we've merged all the systems together. So whether your bank account is in Boston or Seattle or Los Angeles or Kansas City or Miami or Washington, D.C., Charlotte, Dallas, you pick it, it's the same account, same machine, same recognition, same everything. And that's good for the customer.

Q: Bank of America is Connecticut's largest bank, far and away, for many years now. How do you expand or grow when you are in that position?

A: What we have been about for the last number of years is putting together capabilities across all the products a customer wants. So, if it is a commercial customer, it's lending, cash management, but then it gets into capital markets, [merger and acquisition] advice — [this] has only been all put together since 2009. And if you go to personal banking customers, the route is you are under penetrated for a lot of these productsL credit cards to our customers that are credit card eligible, home equity loans, mortgage loans. Our market shares are big, but until every one of our checking customers has a mortgage with us that's eligible, we're not done yet. And we're far from that.

Q: A couple of weeks ago, one of our Congress people expressed some concern about the closing of two branches in Hartford's North End. Studies over time have shown that urban areas where there are poorer populations don't have access to mainstream banking services and have to resort to check cashing. With this decision, how do you justify it?

A: What we've been about is following our customer behavior. If you look across the last several years, we have a lot less physical branches but ones we have are bigger and more of a destination. All over the country, we continue to cluster our branches together into one bigger branch with better parking, more teammates, more talent there to serve customers. So, you bring them into one. But the key is using the ATMs, and ATMs are fully functional in a lot of different ways than they have been ever. Frankly, the mobile technology and other stuff changes the dimension dramatically. Ten percent of all the checks deposited at Bank of America by retail customers are deposited by people taking pictures on their iPads, iPhone or other types of smart phones. That didn't exist in August 2012. So that is the pace of customer change.

[The bank has agreed to delay closing of one branch in Hartford's North End until April from the orginal Oct. 1 shutdown date. The bank also has pledged to explore adding another standalone ATM in the neighborhood.]

Q: Any technological innovations that you see coming in the next few years that you may be working on?

A: We spend about $3.5 billion a year on technology development across all the customer bases. Our ATM, what we call an ATA, is an ATM with a teller assist, which has the ability to pop up a teller on a screen. We have 275 to 300 of them deployed, and the customers love them.

Q: How does that work?

A: You punch a button and talk to a teller. On the ATM. It allows you to do a lot of things. If you lost your debit card, and you wanted to get money, it'll allow you to authenticate like you were standing in front of a real person. Because you are standing in front of a real person. So we built that technology out and we're deploying that out. We want to make sure customers really accept it and use it right. So that's pretty exciting.

Q: Any of those in Connecticut?

A: No. It's still in test mode. What it really does is extend the hours of the branches. And to get this right, machines have to have cash to the penny. So, if you go to an ATM, it dispenses cash and you can deposit checks. But if you want to cash a check you got from a payroll provider, and you're an account holder and the check is $132.32, you can't cash that at an ATM. You can deposit it and take out money. This allows you to cash [it] — it can dispense pennies, nickels, dimes and quarters. As we roll it out, and it works, we'll bring it to other markets.

Q: Since you took over as CEO, it has to have been a tough slog. Can you talk a little about how that has been?

A: The thing that we have with the teammates is an incredible ability to serve clients and customers. A lot of people say, "How do you do it?" The reality is it's the most exciting job in the world when you see our ability to help clients and customers, the 230,000 teammates and what we do in volunteering. If you ever want to feel good, go out and see the teammates and see what they do to serve the clients and then go out and see the clients. You see that this franchise is so capable and people are so talented. We also have a group of talented people to figure a way through all this stuff. And we've made a long way through.